Abstract: One of the key strategic decisions in firms concerns the timing and financing of an investment. However, bonds are not the only source of financing key strategic investments. Government subsidy is an important source of financing. The government uses the subsidy to help the R&D enterprises to solve the problems of insufficient investment. According to a recent report by National Bureau of Statistics. The total expenditure on R&D activities in China was 2,173.7 billion yuan in 2019, with an average annual growth rate of 10.73% from 2015 to 2019. Among them, the total expenditure on R&D activities by companies in 2019 can account for about 79%, and the government accounts for 21%. The state’s financial science and technology funds are increasing year by year at an average annual rate of 12.9%.

Key words: R&D project; uncertain investment; negotiation; financing; government subsidies